Document background
The Acquisition Term Sheet is a crucial preliminary document in Indonesian M&A transactions that sets the foundation for detailed negotiations and definitive agreements. It is typically used in the early stages of an acquisition process when parties have agreed on basic terms but before conducting detailed due diligence and drafting final documentation. The document must account for Indonesia's complex regulatory environment, including the Investment Law (Law No. 25 of 2007), Company Law (Law No. 40 of 2007), and various sector-specific regulations. It's particularly important in cross-border transactions where foreign investment restrictions and ownership limitations apply. While primarily non-binding, certain provisions such as confidentiality and exclusivity are typically binding, making it a significant step in the M&A process under Indonesian law.
